West Virginia Approves Insurance Liens for Cities

House and Senate in West Virginia lawmakers have signed off on allowing cities and towns to tap insurance proceeds when clearing away buildings destroyed by fire.

The bill has been sent Gov. Joe Manchin, who sponsored the proposal to allow municipalities to file insurance liens. Supporters believe it could resolve a lawsuit filed against Huntington by the West Virginia Insurance Federation, an insurance trade group that helped draft the bill.

The new law is a compromise worked out among municipalities, insurers and officials following an industry dispute over an ordinance in the city of Huntington. That measure forced insurers to pay funds on some total fire losses to the city rather than directly to policyholders, which insurers said would violate state law and their private contracts with insureds.